How the Economy Matters From Here to November

Friday’s disappointing jobs report has already generated a lot of speculation about how it might impact the election in November. See, for example, this piece by Helene Cooper and Annie Lowrey, which quotes both Andy and me. My basic take is that the jobs report won’t shift the dynamics of this election very much. Here is why:

1) Late changes in objective economic indicators may not matter. Consider this interesting finding from Robert Erikson and Christopher Wlezien’s book, The Timeline of Presidential Elections. They find that from 1952-2008, one objective measure of the economy—per capita income growth—correlated as strongly with the presidential election outcome in April as in November. To quote them:

…one can predict that actual vote from the current income growth about as well in April as in November. By April, the economic cake is largely baked.

2) The jobs report doesn’t represent a big change. The rejoinder to #1 is, “Well, what if the late change was drastic?” What if the economy collapsed, as in the fourth quarter of 2008? That probably would have a larger impact on the race. (It certainly appeared to in 2008, although it is difficult to peg discrete changes in the tracking polls to specific events in the financial crisis. See the graph here.) But this jobs report is mostly status quo.

3) News reporting didn’t change. Because the jobs report was mostly status quo, so was the news reporting—or at least such was my impression. The jobs report got covered, but not in a way that signals to the average voter that something dramatically bad has happened. It’s important to focus on news coverage because most voters aren’t refreshing the BEA webpage and instead rely on news coverage for their impressions of the national economy.

This gets us to the possibility raised by Andy’s comment in the NY Times piece:

I’m reminded of 1992, when, after the election, a story went around that G. H. W. Bush lost because there was a perception of the economy in recession even though the economy was already improving.

One reason for that perception might have been news coverage. As Marc Hetherington has argued, the more news people reported consuming in 1992, the more they were dissatisfied with the economy. The same thing was not true in 1984 and 1988, suggesting that 1992 was different.

What about this year? It’s the opposite: the more people pay attention to news coverage, the better they think the economy is doing. Here’s a graph the past 7 months of YouGov data:

People who watched a lot of news were much more likely to say that the economy was doing better. To be sure, this relationship is strongest for Democrats. The difference between the least and most attentive Democratic news consumers is 34 points. Among independents, it’s 24 points. Among Republicans, it’s only 7 points. But still, among the group most likely to vote based on its perceptions the economy—independents—there’s no evidence that watching the news makes one more pessimistic about the economy. The same is also true in more recent polls—I looked at the June-August polls specifically—which were conducted when consumer confidence has been dropping.

In short, 2012 doesn’t look like 1992 in this respect: it’s not an election where negative news coverage of the economy may hurt the incumbent even as the objective economy improves.

And unless the objective economy takes a much sharper upturn or nosedive than this most recent jobs report suggests, I don’t think that any late economic trends will matter much come November.

10 Responses to How the Economy Matters From Here to November

sounds like some content analysis of news coverage of the economy comparing ’92 and ’12 would be useful. of course, conservatives would likely argue that the news media was far more eager to tag the recession under george h.w. bush as the “bush recession” than they have been to tag the stagnant economy under obama as the president’s fault. would love to see some numbers on this.

Thomas, the primary issue seems to be that the data as they were coming in during real time:

Nate Silver’s FiveThirtyEight composite economic index which relies purely on objective real-time economic data shows that Bush started the year out with a pretty weak economy, but it approached the break even point for a couple of months.

Non-economic ‘fundamentals’ like incumbent party tenure and public evaluations of the incumbent’s performance as reflected in data like summer approval ratings might have also played a role in Bush 41’s defeat.

“But note that news consumption had no relationship to economic evaluations in 1984 or 1988. If there were media bias at work, presumably it would benefit Mondale or Dukakis, no?”

At first one might think so, and I’d be interested in perhaps digging a bit deeper, but no matter how many stories were published about homelessness under Reagan, people knew from their own experiences that things were pretty good.

In other words…in spite of…..based on the economy itself and, if you were around, Reagan’s habit of going straight to the people…bypassing both Congress and the Media. Very difficult to argue against a booming economy and thus Bush 41’s victory.

That leads us to ’92 and today…Imagine the same kind of media coverage about Obama as Bush ’41.

btw…regarding your presumption, just goes to show the fundamental popularity of Conservative ideas if you consider the actual coverage.

People who watched a lot of news were much more likely to say that the economy was doing better. To be sure, this relationship is strongest for Democrats. The difference between the least and most attentive Democratic news consumers is 34 points.

perhaps 84 and 88 are different, not for political reasons, but simply because reporting on something negative (the economy in ’92 and ’12) is fundamentally different than reporting on something that most folks would say is doing well or neutral (the economy in ’88 and ’84).

the best test of the media bias hypothesis would be to look at whether more news consumption influenced the vote yet again in ’80 with Carter facing a week economy. though it’s hard to compare the news media of today to the 80s-90s since we’re in the cable boutique environment nowadays.

Focusing on the NY Times and the Washington Post from 1980-2008, it find that there is a bias toward reporting bad economic news rather than good economic news. If anything, it finds that this bias is greater under *Democratic* administrations, not Republican administrations. Which is contrary to the notion to CC’s hypothesis, if I am understanding CC correctly.

As the article suggested, problems include that the data and scope of the studies were limited.

There is also the problem in defining negative vs. positive.

The conflict between this study and the fact that those who “watched” the news saw the economy as doing better. I realize local newspaper readership was also included in your graph.

Confirmation bias may well be at work in the McGill study as well.

The gatekeeping functions for
both inﬂation and interest rates do suggest a bias
towards negative information. Particularly where interest rates are concerned, however, G is multipeaked—a
consequence of the not-selection of stories closer to
neutral.

(From your link). Note that there is more of a negative bias , for example, “where interest rates are concerned”.

There is the question of the timing of the “negative articles” in terms of the election cycle.

The juxtaposition of other articles with data claiming that unemployment is best addressed by Democratic Administrations.

In other words, the study you linked may or may not prove what you say it does, depending on a number of other factors. It’s the problem with looking at such things in isolation.

Terms are defined, assumptions are made, conclusions are reached. All of which may reflect bias which affects the final outcome.

Recently I have been using the conclusions reached by some regarding the “Republican Brain” as a prime example of how all of those factors combined to result in “findings” which were both biased and erroneous. A bit off topic, but aimed at the heart of what we are discussing here.